U.S. leads global arms exports surge

Worldwide arms exports are surging. They're up nearly 30% since 2008, according to a new report from defense analyst IHS Jane's.

Weapons exports totaled $73 billion in 2012, up from $57 billion four years earlier. Total worldwide defense spending in 2012 was $1.6 trillion.

The United States far outpaced the pack, and is projected to hold that lead in 2021.

Unsurprisingly, the BRIC countries -- Brazil, Russia, India and China -- are ramping up defense spending in a big way, posting double-digit gains over the next 10 years. By 2021, Brazil is expected to knock Australia out of the top 10.

The United States, meanwhile, is expected to cut spending as it unwinds from Iraq and Afghanistan.

The United States is by far the world's biggest arms exporter. China is tiny, accounting for just 3% of global exports.

That will soon change, though. Rapidly expanding defense budgets in Asia will fuel additional arms exports from Asian countries. By 2021, Asia Pacific defense spending is expected to outstrip that of North America. That could pose problems for Western defense contractors.

"The West's edge on technology will erode this decade," Guy Anderson, a senior principal analyst at IHS Jane's, said in a written statement. "We may already have reached 'peak defense,' with the U.S. dominance of the global defense market under threat."

Even if we've peaked, the decline looks slow. Aircraft, the most valuable defense export, are China's big problem. China is able to reproduce the bodies of advanced Russian jet fighters, but Chinese engineers have not managed to replicate the engine technology, according to Jane's analysts – a situation that is not expected to change by 2021.

The top destinations for U.S. arms were Turkey, Egypt and South Korea. Top destinations for Chinese arms exports are Pakistan, Bangladesh, Bolivia, Venezuela and Zambia.

Worldwide, the biggest arms importers were India, Saudi Arabia, the UEA and Turkey.

The Middle East is the biggest and fastest-growing market for arms exports. Worldwide, this is what people are buying:

Steve Hargreaves is a senior writer covering economic, energy and environmental issues at CNNMoney. Previously, he worked out of Istanbul and Bangkok, and has been published in the Village Voice and the Australian Financial Review. He tweets at @HargreavesCNN